Description of the relation between NSE stock exchange and Swaraj engines ltd.

AUTHOR:      Shivani Kumari (FINANCE- 1)        

21230023728

 

 

INTRODUCTION:    Swaraj Engines Ltd. (SEL) was promoted by erstwhile Punjab Tractors Limited (since merged with Mahindra and Mahindra Ltd.) and Kirloskar Oil Engines Ltd. in 1985. SEL is into manufacturing and supplying of diesel Engines in the range of 22 HP to above 65 HP. The company is equipped with highly productive & precise quality analysing machines. It is also manufacturing hi-tech engine components.
Till date SEL has supplied over 10,00,000 engines for fitment into Swaraj tractors.

OBJECTIVE OF THE REPORT –

To Calculate Beta and its significance of the equity stock of SWARAJ ENGINES LIMITED.

 

VIEWS and REVIEWS :

The tagline of Swaraj Engines is “CONNECTED WORLD. CONNECTED EXPERIENCES. Jagan Kurian  The CEO of Swaraj Engines ltd  sayings which indicate the core values of the company

  • “My aspiration is that M&M become one of the most customer-centric organizations in the world. If we focus on understanding our customers, we will be able to develop customer-centric innovations.”

 

  • “Anyone who makes time frames beyond tomorrow probably isn’t pushing himself hard enough.”

PROCEDURE FOR DATA COLLECTION

First I logged on to NSE official website www.BSEindia.com. Then I clicked on historical data via (https://www.bseindia.com/Indices/IndexArchiveData.html). Then I selected the period from 01st Nov 2022 to 31st Oct 2023 then clicked apply and downloaded the CSV file of the price of the NSE index.

Similar procedure is followed for obtaining the data of data of Swaraj engines limited for the period 01st Nov 2022 to 31st Oct 2023.

 

After downloading the CSV Files of both the NSE index and Swaraj engines limited share price I proceeded to calculate beta of the stock of Swaraj engines limited.

 

PROCEDURE FOR DATA ANALYSIS

For calculating the weekly returns of the stock and the NSE Stock index, I selected the closing price of every last day of the trading week i.e. Friday.

For arriving at the last day of the week I applied the formula =Weekday (cell value,2) then it returns the days signifying: 1 for Monday 2 for Tuesday likewise 6 for Friday , I kept only the no 6 denoting Friday and deleted the rest useless data for the purpose.

 

On performing the above-mentioned procedure, we are left with three columns, the first being date column 2nd being closing prices of the stock and 3rd being closing price of the NSE index.

 

Now we will calculate the corresponding return for each week from the stocks by applying the formula = {(Closing value – Opening Value)/ Opening Value*100}.

 

Formula used,

for calculation of Beta = COVARIANCE (RETURN ON STOCK, RETURN ON MARKET INDEX)/VARIANCE OF MARKET

 

Beta= COV (Ri, Rm)  

          VAR (Market)

 

= {Ri – Mean of Ri} {Rm- Mean of Rm}/No of items

{(Rm- mean of Rm)^2}/No of items

Hence on making the above calculations we get the beta for the company =0.66747 which is less than 1, that indicates that the company is less volatile in nature hence it is suitable for long-term investments.

 

By applying the anova on the above data obtained we obtained the correlation between the stock and market return . .317553 which indicates there is a positive relation between the movement of price of stock and market movements.

Data Analysis:

Equation: Y= .73744 + 0.66747(X)

Interpretation:

 The above equation shows the relation between NSE stock and Sawaraj engines  ltd .

The regression equation is in the form of Y = mx + b, where:

  • Y represents the dependent variable.
  • X represents the independent variable.

Interpreting the coefficients:

  • The coefficient is 737447064 is the intercept of regression line.
  • The coefficient 0.667475319 is the slope of the regression line. It indicates the change in Y for a one-unit change in X. In this case, for every unit increase in X, Y is expected to increase by 0.6674 units.
  • Number of observations are 50.
  • 32016 is the t-stat for Y, the p-value for which is .024629 .
  • R square is 100840339 This value indicates that approximately 10.08% of the variability in the dependent variable can be explained by the independent https://www.swarajenterprise.com/The ANOVA table shows the analysis of variance. The regression has a significant F 0.024629539 with a very low p-value 0.02462. This implies that the overall regression model is statistically insignificant in explaining the variability in the dependent variable.

Conclusion: Beta is 0.667475319 which is less than 1, it means that swaraj engines is good for long term investment.

 

 

References:

http://www.yahoofinance.com/

https://www.https://www.swarajenterprise.com/

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